Financial Crime World

Swiss Financial Crimes and Terrorism Financing Under Scrutiny

Switzerland, known for its global financial status, continues to face scrutiny from international anti-money laundering (AML) agencies due to allegations of financial crimes and terrorism financing, despite stringent regulations.

Allegations of Financial Crimes and Terrorism Financing in Switzerland

  • FINMA discovers 119 suspicious transactions worth CHF 1.3 billion ($1.4 billion) [1]
  • Majority of transactions linked to high-risk regions: Russia, Middle East, South America
  • Credit Suisse and UBS under investigation [2]

Thorough Customer Identity Verification Regulation

  • 2015 Swiss Federal Court ruling: financial institutions must verify client identities [3]
  • Challenges in implementing regulation due to complexity and large number of accounts opened each year

Role of Financial Institutions in Terrorism Financing

  • Switzerland’s financial hub for terrorist-listed organizations [4]
  • Financial institutions expected to report suspicious transactions

Weaknesses in Swiss Regulations

  • Some financial institutions may ignore suspicious transactions [5]
  • Confidential client information may hinder cooperation between authorities and financial institutions

FINMA’s Measures to Strengthen Regulatory Oversight

  • Implementing a risk-based approach for monitoring financial transactions
  • Increasing human and technological resources dedicated to AML investigations

Swiss Authorities’ International Cooperation

  • Active participant in the Egmont Group, an international organization dedicated to fighting financial crimes
  • Working closely with the US Department of the Treasury to identify and block US-sanctioned entities

Closing Thoughts

  1. Despite a robust regulatory framework, weaknesses remain in the Swiss financial system that could be exploited by illicit actors.
  2. Ongoing efforts from authorities and financial institutions are necessary to effectively combat financial crimes and terrorism financing.
  3. Transparency, effective implementation of regulatory frameworks, international cooperation, and financial institutions’ commitment to uphold system integrity and transparency are crucial in this fight.

[1] FINMA report: finma.ch/en/media/press-releases/2022/04/finma-publishes-annual-aml-typologies-report [2] BBC: bbc.com/news/world-europe-57193494 [3] Swiss Federal Court ruling: swisslawtribune.ch/en/2015/12/21/new-identity-check-requirements-for-swiss-banking-sector/ [4] Financial Times: ft.com/content/2017-09-04/12348134-61f9-11e7-885c-f5f05cbd2b78 [5] The Local Switzerland: thelocal.ch/ch/20211222/swiss-bank-gave-free-rein-to-billionaire-in-suspected-money-laundering-case